JDS Uniphase to Acquire SDL for $37 Billion

N E W Y O R K, July 10

Acquisitive JDS Uniphase Corp., trying to meet booming global demand for fiber-optic equipment,
said today it was snapping up SDL Inc. for about $36 billion in stock, beating out rivals to forge the largest takeover of a technology equipment maker on record.

The acquisition was originally valued at $41 billion when the
companies announced it early today, before investors sent shares
of JDS Uniphase down 13 percent.

JDS Uniphase only last month completed the purchase of E-Tek
Dynamics, which also makes fiber-optic network equipment, for $15
billion.

JDS Uniphase and SDL each manufacture products needed for
high-capacity fiber-optic networks, which allow for increased
telecommunications traffic. Demand for such products is growing as
high-speed audio and video transmission become more prevalent on
the Internet.

Under the terms of the deal announced today, each share of SDL
will be exchanged for 3.8 shares of JDS Uniphase. At Friday’s
closing prices, that would represent a 49 percent premium for SDL
shareholders.

Investors reacted by pushing shares of JDS Uniphase down $15.063
to $101.125 in trading on the Nasdaq Stock Market, while
shares of SDL rose $25.375 to $320.688.

“We also expect to enable the migration from today’s hybrid
integration and module level products to tomorrow’s truly
integrated system on a chip,” he added.

SDL makes optical equipment for fiber-optic networks to
carry exploding volumes of Internet traffic. The phenomenal
growth of this market has already created market stars like
Cisco Systems and Nortel Networks Corp.

Said JDS CEO Jozef Straus: “By now we all know that the
Internet is taking over the world and what that means about the
need for bandwidth. Optical is clearly the only solution and our
customers are building tomorrow’s systems, need higher levels of
integration and more complex products every day.”

Approvals Required for Deal

The union is expected to close by December, pending
shareholder and regulatory okays, including key U.S. Justice
Department approval, JDS said.

The Justice Department asked for
further details when JDS bid in January for E-Tek Dynamics, but the deal ultimately won
approval.

“I believe that this is a transaction that will serve
customers well and we believe that the regulatory authorities
will come to that conclusion, although we can’t predict the
timing in a regulatory review situation,” said Anthony Muller,
JDS’s chief financial officer in a telephone interview.

After the deal is completed, SDL will
operate as a wholly owned subsidiary of JDS Uniphase.

San Jose, Calif.-based SDL, which has about 1,700 employees,
earned $14 million on revenue of $72 million in the three months
ended March 31. JDS Uniphase, with offices in San Jose and Nepean,
Ontario, has about 17,000 employees. During the first quarter of
2000, it lost $241 million on revenue of $395 million.

JDS is one of the biggest of a tier of so-called
“merchants” or independent component manufacturers that serve
and compete against companies such as U.S.-based Lucent
Technologies, Canada’s Nortel and France’s Alcatel, which in
turn supply telecoms companies.
The Associated Press and Reuters contributed to this report.